Mr CHESTER (Gippsland) (4.03 pm) — Minister, I start with a question related to the increase in the order of $30 a week that the government made to the single age pension, which I must say was well received in the electorate of Gippsland. It was a major issue in the lead up to the Gippsland by-election and an issue throughout Australia. I am particularly concerned, though, with subsequent events. The Victorian state government has decided to increase rents for public housing tenants. I have corresponded with your office on this issue, and my concern is that there is one level of government giving with one hand and another level of government taking with the other hand. It really is an issue that older Australians struggle with; they struggle with the concept of it. I am wondering whether there is anything the minister can do through COAG or any other instrument to try to protect older Australians from this increased cost of living, which came at the hand of one level of government while your own level of government was endeavouring, I believe, to make things a bit easier for older Australians.

Ms MACKLIN (Jagajaga—Minister for Families, Housing, Community Services and Indigenous Affairs) (4.04 pm) — I thank the member for Gippsland for that question. I also thank him very much for the acknowledgement of the very considerable increase that the government has made, especially to the single age pension. In fact, if you look at the impact on the single age pension of both the increase in the base rate and the impact of the changes to indexation that the government has made, there has been an increase of around $100 a fortnight. So it certainly has been aimed at helping single age pensioners. I know the member for Gippsland was not in the parliament during the past 12 years, but it is the case that neither the Liberal Party, when it was in government, nor the National Party did what needed to be done for pensioners, particularly not for single age pensioners.

The member for Gippsland asked me particularly about the impact on public housing tenants. I very much appreciate him raising this matter also. Both the Treasurer and I have made it very clear to each and every one of the state governments that we do expect the increase in the pension that we introduced last September to flow through to pensioners and not be gobbled up in increased rent. We have made this very clear, and we do expect the state governments to allow pensioners to keep this increase in their purses and wallets. I am pleased to inform the member for Gippsland—and I am pretty sure, but I will double check—that South Australia, Tasmania and Queensland have all committed to this on an ongoing basis. Other states have said that they will do it for a limited period of time. I have made it very clear that we are not talking about a limited period of time. We think this is a very important issue. I have been informed that we have yet to hear from the Victorian government about whether or not it will be time limited. I think the member for Gippsland should join with us in making sure that all the states, including New South Wales, Western Australia and the territories, also do the right thing, along with Victoria. They all need to do the right thing by pensioners and make sure that the increase in the pension is held onto by pensioners.

The member for Gippsland also raised the broader question of cost of living. Once again, I appreciate him raising this, because another major change that we put in place in our announcements last September was a change to the indexation arrangements for the age pension. We have heard over the years from pensioners that they do not feel that the consumer price index reflects their cost of living, so we asked the Australian Bureau of Statistics to develop a new pensioner living cost index. That has been done. The pensioner living cost index has now been used to increase the pension, last September and again in March this year. I say again to the member for Gippsland that this was never done by the previous government. The previous government did not recognise that pensioners needed a separate measure of cost of living increases. We have put this in place in our first term of government, and we have also increased the wage cost index. The member for Gippsland may be aware that we have two ways of making sure that the pension keeps up with the cost of living and the overall standard of living. For some time now the pension has been pegged at 25 per cent of male total average weekly earnings, and it was this government that increased it to 27.7 per cent. That too has been part of the reason we have seen the single age pension go up by $100 a fortnight. I thank the member for Gippsland for the opportunity to reinforce just how important these pension reforms have been, particularly for single age pensioners.